TOKYO, May 16 (Reuters) - The dollar held close to a 4-1/2
year high against the yen on Thursday, with buying from Japanese
importers helping it to recoup some of the losses suffered after
disappointing U.S. industrial data, while the euro wobbled near
a six-week low.

The greenback tacked on 0.1 percent to 102.37 yen,
pushed up by investors eager to buy on the dip as further upside
is seen for the dollar, according to a trader at a major bank.

"Importers are getting desperate, so as soon as the dollar
is sold off a little bit they come in to buy around 102, which
keeps it from falling too far," he said.

Against a basket of currencies, the dollar
gained 0.1 percent to 83.825, but could not reclaim the near
10-month peak it fell from on Wednesday when data showed U.S.
industrial production dropped more than expected in April, while
the New York Fed's business conditions index revealed a
contraction in May.

The dollar is now up 0.9 percent on the week after adding
1.3 percent last week.

Recent chatter in financial markets about the possibility of
the Federal Reserve winding down its third round of quantitative
easing has emboldened dollar bulls.

"Of course data releases will impact the dollar, but the
real focus is the Fed's QE3 programme. People will be watching
statements from officials today and Bernanke at the weekend very
closely for hints on when they might exit," said Yoshio
Takahashi, currency strategist at Barclays in Tokyo.

"The data just shows that the U.S. economy is not uniformly
strong, so there is uncertainty about when they could stop
easing," he added.

EURO UNDER PRESSURE

The euro wallowed near a six-week low of $1.2843 hit on
Wednesday after data showed France had slipped into
recession, while the euro zone economy contracted for a sixth
consecutive quarter.

On Thursday, the common currency was 0.2 percent off late
U.S. levels at $1.2866.

It was steady against the yen at 131.751, but
analysts said it was unlikely to top the 3-year high of 132.78
hit on Tuesday, given that the European Central Bank said it
could cut the deposit rate to zero if the region's economy
deteriorates further.

"Compared to the strengthening U.S. economy the euro economy
is stagnant. I think the euro has a lot of room to fall from
here- we feel that it has diverged from fundamentals a bit
much," said Masashi Murata, senior currency strategist at Brown
Brothers Harriman.

On Thursday, the Australian dollar dropped 0.6
percent to $0.9838, shattering support at 0.9850, while the Kiwi
reclaimed 0.1 percent to $0.8246.

The Aussie has lost 5.1 percent this month, with its fall
sharpened by a surprise rate cut from the central bank, while
the Kiwi has dropped 3.6 percent.

By comparison, the yen has tumbled 18 percent against the
dollar this year, helped by aggressive monetary easing by the
Bank of Japan. If it does not rebound in the remaining seven
months of this year, the dollar would mark its best year against
its Japanese counterpart since 1979, when it gained 23.7
percent.

Brown Brothers Harriman's Murata believes the yen could
rebound as BOJ's "easing has lost its potency as a market
driver, and there are demerits to a weaker yen such as rising
import prices."

"In fact, we think the dollar could drop back to 95 yen by
the end of June, and we see the base of its year-end range as 90
yen," Murata said.